The province has announced a fix for an issue long plaguing Stettler County, along with many other municipalities across the province.
Alberta Energy Minister Pete Guthrie announced on March 20 that he is issuing a ministerial order which will require Alberta’s Energy Regulator (AER) to “receive evidence that municpal taxes have been paid when approving licence transfers or new licences” for oil and gas leases in the province.
“While most companies pay their taxes regularly and on time, there are a few delinquent companies that owe overdue property taxes,” said Guthrie, in a written media release. “That is why we’re putting in place this ministerial order – to continue building on our recent work. Our goal is to reduce unpaid taxes throughout the province.”
Additionally, Municipal Affairs will restore a “special lien” in the legislation which will move municipalities up the priority list over other creditors.
“We have been lobbying for these changes for several years now, alongside the Rural Municipalites of Alberta (RMA), and we are very pleased the Alberta Government has finally taken action to hold oil and gas companies accountable, and protect rural Albertans and rural municipalities from companies who are choosing to ignore taxation obligations,” said Stettler County Reeve Larry Clarke.
“We are pleased to work with, and we welcome oil and gas businesses operating in our region. But they need to remember, as they extract Alberta’s resources, they are using rural infrastructure and services, and therefore have an obligation to pay their taxes and contribute to the local economy and rural sustainability. Rural Alberta is where it all begins.”
According to Clarke, himself and other County of Stettler councillors met with Minister of Municipal Affairs Rebecca Schulz shortly after the announcement and found out that the change will be effective April 30.
“We encouraged and requested Municipal Affairs closely monitor this timeline to ensure proper implementation occurs, and we will follow up on this implementation ourselves,” said Clarke, before noting that the change is a good start, but still more needed to be done as there is a “continued problem” of county ratepayers with oil and gas assets on their property who are not being paid lease rentals.
Unpaid oil and gas taxes has been an ongoing issue in the province for years.
Stettler County alone has written off several million in unpaid taxes since 2016 in order to get the Provincial Education Requisition Credit (PERC), which gives municipalities a reduction on their education property taxes from uncollected oil and gas taxes; however, the return from PERC is only a small percentage of overall loss.
According to a Government of Alberta survey in 2022, unpaid oil and gas taxes owed to municipalities were reported to be sitting around a cumulative $220 million across the province that will not be recoverable outside of court proceedings as much of the money has already been written off.
The release reporting the change further notes that around $76 million is owed by companies that are still operating, which leaves hope that at least some of the taxes in arrears can be recovered through repayment agreements.
Paintearth County, the County of Stettler’s neighbour to the east, has also had issue with unpaid oil and gas taxes and echoed Clarke, though also noted Stettler County’s apparent role in making this change happen.
“The County is pleased to see that the province is taking measures that we’ve asked for now for a number of years, to compel delinquent oil and gas companies to pay. In Paintearth, we’ve been fortunate that losses on unpaid oil and gas taxes has been limited to a few, non-local outfits, while our area-based companies are continuing to be good stewards and community contributors,” Stan Schulmeister, Reeve for the County of Paintearth, said.
“I believe four years ago it was in Stettler at one of MLA Nate Horner’s info sessions that the measure now being taken was suggested. I see that Nate’s been a man of his word, taking our requests and suggestions to the Energy Ministry to be put into action. We’re fortunate to have good representation in our area from the province.”
